From time to time an issue is uncovered that needs to be corrected and brought to HMRC’s attention. To do so is usually known as a ‘voluntary disclosure’ and is actively encouraged by HMRC. There are a number of routes to disclosure, depending what the issue is.
Sometimes HMRC will send ‘nudge’ letters which prompt a disclosure. Recently it has been doing this where HMRC has information about offshore bank accounts, and has sent letters asking individuals to check that any income arising abroad that should have been in a UK tax return has been dealt with correctly.
In recent months, HMRC’s nudge letter campaign has given particular focus to hundreds of UK customers of Euro Pacific bank. This is HMRC’s latest effort in a series of campaigns to tackle international tax crime and money laundering. If you have been contacted in relation to an account with Euro Pacific Bank, please see here for some further information.
HMRC has also been very active around second properties, checking whether individuals own multiple properties and whether rental income appears to have all been declared. HMRC has a system called ‘Connect’ which is getting better all the time in pulling information together across multiple information sources and then comparing that information to submitted tax returns. Where gaps or anomalies appear, it will either open an enquiry or in some instances send a ‘nudge’ letter.
Depending on the type of issue, there are a number of ways to make a disclosure to HMRC.